While the world hits brake, India sees a hiring surge: Here's what driving the job market momentum

In a global economy grappling under the mounting weight of hiring freezes, inflation anxieties, and softening demands, India's job market is charting a divergent path against all odds.

As Western economies from Europe to the Pacific scale back recruitment, India is experiencing a tangible acceleration in job creation, defying global trends with a momentum that appears structural rather than personal.The latest data from global recruitment platform Indeed reveals that Indian job postings surged by 8.9% in May 2025, ending an eight-month downward streak. Although still 1.8% below last year’s levels and approximately 16% off their pandemic-era peak, the broader picture is far more compelling: Job postings remain nearly 80% above pre-pandemic volumes, placing India at the top tier among global labour markets.What appears on the surface as a numerical rebound is in fact emblematic of deeper economic shifts stemming from policy, demography, digitisation, and a fundamental reordering of labour market. As other nations stall or retreat, India’s job engine is not merely running; it is gathering speed.

Formalisation: The silent force redefining Indian employment

The most remarkable force behind India’s hiring boom is its systemic transition from informal to formal work structures.

What once operated in the shadows of the economy is now being accounted for, taxed, regulated, and empowered. Policy interventions, such as the GST rollout, digitised compliance frameworks, and unified labour codes, are bringing unprecedented transparency and legitimacy to millions of jobs.Callam Pickering, APAC Senior Economist at Indeed, explains: “India is undergoing a formalisation that most economies are not.

This transition is making formal job creation stronger than overall employment growth.”Formal jobs mean contracts, benefits, and visibility, an essential trifecta for sustainable workforce expansion. And as businesses embrace digital hiring and payroll systems, the pace of this formal shift is only accelerating.

Post-pandemic demand: Not a rebound, but a redesign

India’s hiring spike is not a reflexive rebound from COVID-era job losses. It is a recalibration driven by recalculated needs.

Pandemic disruptions forced businesses to rethink their structures, and individuals to reassess career paths. The result: Demand has shifted into new sectors, reflecting altered lifestyles and emerging national priorities.According to Indeed’s latest data, hiring surged in:

These gains point to the country’s shifting socio-economic compass: more families seeking domestic support, more students turning to remote and hybrid learning, and a manufacturing sector that is beginning to benefit from supply chain realignments and “China-plus-one” strategies.

The rise of Generative AI: A tech sector reborn

With Artificial Intelligence known to disrupt its birthland, software engineering across the globe, India has a silver lining to offer. Though the conventional software programming roles have witnessed a significant decline of –4.2%, the graph for India’s tech sector has demonstrated a modest inflation rather than erosion. Generative AI is breathing new life into recruitment patterns. According to the data revealed by Indeed, in May 2025, 1.5% of all job openings listed generative AI, which is double that of the previous year.

12.5% of data analytics roles now reference generative AI.Karnataka and Telangana are leading regional hubs for AI roles, with 2.4% and 2.3% of job postings, respectively, containing related keywords.Hence, the question now is not whether AI will disrupt the job market, rather it is that whether we have learnt to co-exist with the emerging technology.India is fast becoming an R&D command centre in the global AI revolution.

These roles aren’t limited to coders; they traverse through marketing, business intelligence, and scientific research. As demand for AI integration grows, so does India’s strategic positioning as a workforce capital.

Demographic advantage: Youth meets opportunity

Well, on one hand, where most of the world is ageing, India is still cherishing its youth. With over 65% of its population below the age of 35, India continues to be one of the few nations where the labour force is still expanding.

This demographic edge, coupled with lower wage expectations and rising skill levels, makes India a natural choice for multinational employers navigating global cost pressures.However, this is no longer just about the arbitrage. Increasingly, Indian talent is sought not for affordability but for adaptability, English fluency, and STEM proficiency. As Western labour markets shrink and labour costs balloon, India remains a deep, untapped reservoir of intellectual capital.

Skill development and digital push: Laying the groundwork for long-term gains

Government initiatives have played a key role in equipping India’s workforce for emerging demands. Programmes like Skill India, Digital India, and the Pradhan Mantri Kaushal Vikas Yojana have widened access to vocational training, especially in Tier II and Tier III cities.The impact is visible: Digitally literate candidates, job-ready graduates, and certified technicians are entering the formal economy at an accelerated pace.

This groundwork is strengthening India’s capacity to meet domestic needs and attract international hiring mandates.Still, one challenge looms large: The skill gap. While the quantity of labour is India’s strength, quality remains a constraint in some advanced sectors. Solving this mismatch will be the difference between a temporary spike and a sustained employment miracle.A nation in transition, not just in recoveryIndia’s labour market is not simply recovering, it is being reshaped.

What we’re witnessing is not cyclical; it is epochal. Formalisation, digital transformation, sectoral diversification, and a generational demographic advantage are converging to create an employment environment unlike any in recent memory.

The global slowdown is real, but India’s defiance of that trend is equally real, and deeply consequential. If current momentum can be matched with policy foresight, educational reform, and infrastructure readiness, India may not just weather the global hiring storm, it could emerge as its antidote.